Is inflation beginning to get back to normal in the euro-zone? It seems that oil prices are moving up and so is CPI, that beat expectations with +0.3%. Another positive surprise comes from core CPI which rose 0.9%, much higher than +0.6% that we have seen so many times in recent month.
EUR/USD is now making an attempt to retake 1.10.
The better than expected numbers feed into tomorrow’s all important ECB meeting. Will Draghi show optimism as inflation is off from the bottom or will he see it as a one-off and push through with QE all the way?
The euro-zone was expected to report an annual rise of 0.2% in the Consumer Price Index (headline CPI) after 0% in April. Core CPI was predicted to rise by 0.7% y/y from 0.6% last time.
EUR/USD was on a recovery path towards the publication, trading around 1.0980.
Yesterday, Germany released its preliminary May inflation read and it came out stronger than expected.
More: EUR/USD Still On Track To Break Below Parity – BTMU
In our latest podcast, we discuss commodity currencies, oil hedging and preview next week’s events.
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